A thermal solar geyser is generally considered to be a lower risk for insurers compared to a photovoltaic (PV) driven solar system due to several factors:
- Simplicity and durability: Thermal solar geysers are relatively simple systems that rely on the direct conversion of sunlight into heat to warm water. They typically consist of fewer components and have fewer points of failure compared to PV systems, which involve complex electronics and multiple interconnected parts. This simplicity and durability make them less prone to malfunctions or damage, reducing the risk of insurance claims.
- Maintenance requirements: Thermal solar geysers typically require less maintenance compared to PV systems. They do not have moving parts or delicate electronic components that may need regular servicing or repairs. This lower maintenance requirement decreases the likelihood of insurance claims arising from mechanical failures or system breakdowns. One should also keep the maintenance factors of the tank the PV system is connected to in mind, as that will have its own maintenance requirements.
- Lower replacement cost: In the event of damage or failure, the cost of replacing a thermal solar geyser is generally lower compared to a PV system. PV systems involve costly solar panels, inverters, wiring, and other equipment, whereas thermal solar geysers primarily consist of a solar collector and storage tank. The lower replacement cost reduces the potential insurance payout in case of a claim. In the insurance environment, the most common failure point is the controller or electronics which is typically not that costly to replace but is certainly not inexpensive.
- Fire risk: While all electrical systems carry some risk of fire, PV systems have a higher fire risk compared to thermal solar geysers. PV systems rely on electrical currents and have multiple electrical connections, making them more susceptible to electrical faults and potential fire hazards. Insurers may view this higher fire risk associated with PV systems as a factor increasing their exposure to claims.
- Market experience and data: Thermal solar geysers have been in use for many years, and insurers have accumulated a significant amount of data on their performance, reliability, and risk factors. This historical data allows insurers to better assess the risks associated with thermal solar geysers and offer insurance policies accordingly. In contrast, PV systems, especially larger installations, are a relatively newer technology, and insurers may have less data and experience to accurately evaluate the risks involved.
It’s important to note that insurance policies and risk assessments can vary between insurers, and individual circumstances may influence the perceived risk of specific solar systems. It’s always advisable to consult with insurance professionals or companies to understand their specific risk assessments and coverage options for solar installations, especially in the community scheme environment.
*Watch our series of short video clips on the Addsure YouTube channel about this and other solar insurance information.
Article by Mike Addison from Addsure and Glen van der Vyver from 0861WaterLite.